What's in Your Mobile Wallet?

Lessons from Bank-Branded Wallet Pioneers

As consumer awareness of mobile wallets has risen dramatically, financial institutions have a perfect opportunity to stake a claim in this market and maintain a top-of-wallet position with their customers. Soon, the barriers to wallet adoption will drop, issues with merchant adoption and consumer hesitation will lessen, and FI-branded wallets stand ready to reap the benefits. Successful first movers will secure valuable interchange and transaction data, and be well-positioned to tap into a proximity payments market projected to reach $54 billion by 2019.

However, consumers are not sitting on the sidelines, waiting for their primary FI to enter the fray. For the first time, in 2015, consumers switched their preferred wallet providers from their primary FI to PayPal and Visa. Two early bank entrants are taking very different paths to market in the hopes of reversing this recent trend. Capital One Wallet and Chase Pay differ both in their choice of technology and the value proposition for their wallet adopters. Capital One Wallet uses NFC, while Chase Pay has turned to QR codes as their presentment model. One builds merchant incentives, while the other targets a more seamless experience at checkout. Both seek to change the state of play: moving the goalpost from card-based top-of-wallet metrics to emerging top-of-home-screen smartphone measures. This report provides a detailed look at mobile wallet adoption, drivers and hurdles, and introduces Javelin’s S.C.O.R.E. wallet analysis model for assessing and comparing competing wallet providers.

Key questions discussed in report:

What is the ROI of building a bank-branded mobile wallet?

Which brands do consumers prefer as wallet providers?

Which consumers are using mobile wallets today?

What is the Javelin S.C.O.R.E. mobile wallet analysis model?

How do Capital One Wallet and Chase Pay mobile wallets compare?

What are the best practices for building a bank-branded mobile wallet?

The consumer data in this report is based on information collected from several Javelin surveys that targeted populations representative of the overall U.S. population in proportions of gender, age, and income:

A random-sample panel of 3,200 respondents collected online during November 2015. The overall margin of sampling error is +1.73 percentage points at the 95% confidence level.

A random-sample panel of 3,195 consumers collected online during June 2015. The overall margin of sampling error is 1.73 percentage points at the 95% confidence level.

A random-sample panel of 3,225 consumers collected online during June 2014. The overall margin of sampling error is 1.73 percentage points at the 95% confidence level.

This report examines consumer behavior based on three segmentations by generation as well as two segmentations within one generation. Putting labels on entire generations can place exaggerated emphasis on specific birthdates, suggesting that someone born on New Year’s Eve is somehow likely to think and act differently than someone born on New Year’s Day. To minimize that effect, Javelin applies slightly overlapping 20-year periods to define the generations as: